Nearly two in three American renters have thought about moving to a cheaper place because of current economic conditions, new research suggests.
In fact, a similar percentage of people believe they’ll never become homeowners because of that reason.
Out of 2,000 renters polled in November, 74% say they’re worried about the state of the economy, and seven in 10 reported their income is not enough to make ends meet with rent, bills and home essentials.
That reason could explain why half of respondents are in debt with their landlords — and it doesn’t help that 61% saw their rents rise in the last year.
With these financial difficulties in mind, survey respondents suggested that, on average, 31% of one’s income should go to monthly rent payments, and 35% should go to other monthly expenses and necessities.
However, 69% are optimistic their economic situation will improve in 2023.
According to the survey conducted by the insurance company Lemonade and OnePoll, 57% of respondents revealed that inflation has affected their rental decisions.
Of those renters in that category, 65% have had to look for homes with the cheapest rent; 60% downgraded the size of their apartment or house; and 57% have tried to negotiate a reasonable price with their landlord.
Regardless, 65% think the rental market will continue to rise post-COVID.
When asked what they thought were the advantages of renting, most tenants cited reasons such as not worrying about property taxes (69%); having the flexibility to live anywhere (66%); and not worrying about repair bills (59%).
Respondents also listed the disadvantages of renting, such as dealing with a bad landlord (62%); being subjected to rent hikes (61%); and being unable to make changes to their rental property (60%).
“Between the cost of rent, a lack of inventory and the mass migration we saw throughout the pandemic, the rental market has fluctuated tremendously across the country over the past few years,” Sean Burgess, chief claims officer at Lemonade, said in a statement.
“And while we’re starting to see prices regulate throughout the market and a return to more traditional moving trends, rising inflation and general fear of recession will continue this turbulence for a little while longer.”
The survey also asked respondents to describe their rental status, with 53% saying they signed a new lease agreement during the pandemic.
Of those who signed a new lease during that period, 73% said it was a “sweetheart deal” or an unofficial agreement between them and their landlords.
It’s no surprise that 84% now regret signing those sweetheart deals in the first place. Many respondents also realize that those unofficial deals don’t offer them protection as renters; it’s only temporary; and it doesn’t offer them any stability.
Still, 64% think the current home they are renting is worth the money they’re paying.
“Now more than ever, a lot of renters are paying more on their monthly rent than they originally expected, so what better time than now to protect yourself from other financial burdens?” Burgess added.
“This is where renters insurance can play a big part, protecting not only the things in their home but also themselves. For instance, if someone’s apartment becomes unlivable due to a fire or they’re liable if someone is hurt in their home, they’re potentially covered through their insurance policy. At the end of the day, this could save hundreds or even thousands of dollars in unexpected expenses.”
Ex-Brit turned Manhattan resident since 2008.